Performance Boat Shop

Can Graham obtain a decree of specific performance?

Chiu agreed to sell his custom-built sailboat to Graham for $60,000. Before delivery, Chiu received another offer for $68,000 and wrote to Graham that he had decided not to sell his boat after all? My questions-yes or no 1. Can Graham obtain a decree of specific performance? 2. Would a suit for money damages completely satisfy Graham? 3. Can Chiu avoid Graham's suit by claiming that he was merely selling to the highest bidder?

Public Comments

1. From the sound of the question, you must be a law student...or a soon to be law student since it's contracts. If u are a soon to be law student, good luck as a 1L. The answer to your three question hinges first on whether there was a valid contract or just an offer. If Chiu had only made an offer and Graham had not accepted before the revocation, Graham would not be entitled to specific performance. Assuming a valid contract, a plaintiff is entitled to specific performance only when (1) legal damages are inadequate, (2) there is mutuality, (3) it is feasible to enforce such a relief, (4) and no valid defense applies. Here, since the sailboat was custom built, it is arguable that legal remedies are inadequate. As long as Graham has the money to specifically perform, mutuality will be met. Assuming the parties are in the same state and the property is in the same state, the feasibility factor will be met. Potential defenses include unclean hands, laches, and impossibility. Assumine none of those defenses apply, Graham would be able to obtain a decree for specific performance. As mentioned above, since it's a custom-built boat, presumably with special features, money damages would probably not be satisfactory to Graham. If it could be completely satisfied, however, Graham would only be entitled to compensatory damages. He would not be entitled to punitive damages since such damages are not allowed in contract cases. Chui cannot avoid suit by claiming that he was merely selling to the highest bidder as long as the contract is valid and enforceable. Again, if Chui had only made an offer and Graham had not accepted before Chui's revocation, then the revocation would have been effective and there would be no valid contract. Accordingly, in that situation, Chui would win.